Just two years after acquiring a controlling stake in the company, MTN South Africa has announced it will dispose of its 50,02% stake in Afrihost to the Internet service provider’s management team.
MTN acquired the stake in June 2014 for R408m, with existing shareholders, including management, retaining the remaining 50% of the business. It’s not known how much it’s disposing of the stake for, though presumably it will be disclosed in a future MTN financial report.
In August 2015, then newly appointed MTN South Africa CEO Mteto Nyati told TechCentral that the mobile operator was not prepared to continue providing data to the ISP at below cost.
Nyati said at the time: “Let me be open about this. Afrihost has been a customer of MTN Business for a long time. We have given them wholesale prices that were subsidised by MTN. We cannot afford to do that going forward.”
MTN said on Thursday that the sale of Afrihost is in line with its “strategy of focusing on core business and pursuing opportunities in relevant adjacent businesses”.
“Evolving market circumstances have resulted in MTN reviewing its ownership in Afrihost. As a result, MTN has agreed to dispose of its shareholding to the executive management of Afrihost,” it said.
Nyati said the disposal will allow both parties to focus their attention on their core businesses.
Afrihost CEO Gian Visser said: “We have enjoyed a long and fruitful partnership with MTN over the years and we are grateful for everything they have done for us. MTN will remain a key supplier of ours, and we look forward to continue working with them for the years ahead.”
Afrihost was formed in 2000 as a Web hosting and IT services company by Visser, Brendan Armstrong and Peter Meintjes. The trio was later joined by Greg Payne, who is Internet Solutions’ former chief operating officer. Former Internet Solutions CEO Angus MacRobert has also invested in the business.
In 2009, Afrihost entered the broadband ADSL space and, through aggressive pricing plans, caused a stir in the market.
Afrihost and MTN first joined forces in 2012. Before that, Afrihost had secured bandwidth through Internet Solutions.
MTN said the planned disposal of its stake in Afrihost is still subject to regulatory clearances and Competition Commission approval. — © 2016 NewsCentral Media
- See also: So, why did MTN buy Afrihost?